Al-Madinah Muslim Free School In Derby Criticised By Government Over 'Conflicts Of Interests' (VIDEO)

A Department for Education's (DfE) report, leaked to Channel 4 News, has roundly criticised a Muslim free school in Derby, suggesting that the governors had conflict of interests with school suppliers, while disparaging the school’s ability to keep accurate accounts.

The report follows a September audit of the Al-Madinah School, which revealed irregular payment in excess of £20,000, as well as the close involvement of some of the governors with suppliers to the school “either directly or through family connections".

In October, the school was lambasted by Ofsted as “dysfunctional”, criticism that led Shazia Parveen, the chair of governors, to step down from her position. Lord Nash, the education minister, is scheduled to meet the school’s governors on Tuesday, with the school’s future in question.

According to Channel 4 News, the DfE's audit said the school had been left in a “complicated” situation after the resignation of several senior figures, including the principal, vice principal and business manager.

The Al-Madinah School was called 'dysfunctional' in a government report

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According to the audit, those who had conflicts of interest are reported to be one former governor and one current governor whose companies supplied the school, one governor with relatives working as suppliers to the school and another governor with a relative working at the school.

It found further potential conflicts with one governor whose company provides HR services to the school. There was also found to be no complete record of expenditure or receipts from September 2012 to August this year. The report also exposed gaps in policies at the school, which it said had no guidance on what travel expenses or meals could be claimed.

Ofsted's report, published last month, condemned the running of the school, concluding that the governing body is ineffective and had failed to appreciate how poor pupils' experiences are. It stated: ''The basic systems and processes a school needs to operate well are not in place. The school is in chaos and reliant on the goodwill of an interim principal to prevent it totally collapsing.''

Al-Madinah, which has been criticised following claims it discriminated against women, required staff to cover their hair regardless of their religion, and made girls sit at the back of the class, was rated inadequate in each of the categories Ofsted examines. Al-Madinah, which is one of the Government's flagship free schools and is run by the Al- Madinah Education Trust, opened last September.

On its website it describes ''a strong Muslim ethos'' with shorter holidays and longer school days ''to maximise opportunities for pupil achievement and success''.